Fw: Take That To The Bank
Sent from my Verizon Wireless BlackBerry
You know the old addage "The only stupid question is the one not asked"? Time and time again I find myself avoiding the need to ask basic, fundamental questions about things, and it is this lack of initiative that has left me astounded by the claim made in a new book I am reading.
One question I never asked was "What is money based on?" To my horror, I have learned that the "U.S. Dollar" is pegged to NOTHING! We came off the gold standard decades ago (begun under FDR and finalized under Nixon), so now we have 'notes of legal tender' issued by the Federal Reserve (a private institution, not a government agency....think FEDEX) that are backed up by our Government's promise to repay the debt issued to created the currency. Got all that? Don't worry, I had to read this subject three to four times to understand it.
Basically it goes like this: The US Government pays for its' budgets via taxes. Collected revenue, however, is never enough, so they issue Treasury Bonds (T-Bills) to make up for this shortfall and hope people buy them up. Those T-Bills not bought on the free market are purchased by the Federal Reserve, which pays for these bonds by issuing dollars (with added interest due) that the government can than use. So, in essence, our currency is based on nothing more than a promise by the Federal government to honor its' debt obligations if called upon to do so.
Wait, it gets worse. Through a banking scheme called 'fractional reserve banking', the Federal Reserve issues even more currency, but this time to private banks in the form of credit, based on the T-Bills it holds as reserve assets (hence the name Federal Reserve), but does so at a ratio averaging 9:1. What does this mean? Long ago, as the author of "The Creature From Jekyll Island writes, bankers noted that depositors rarely made complete withdrawals, but only took out at most 10-15% of their deposits at any given time. Bankers than decided that it was mathematically safe to create additional lines of credit or loans from these deposits belonging to someone else. Is this not insane?! So, for every dollar held in reserve, the Federal Reserve created up to 9 additional dollars to lend out.**Poof** Magic!
As time went on, Bankers became despondent over the limiting lending ability of 9:1 fractional reserve banking, so they pushed for a break with the gold standard. When this was done, our economy entered the dangerous waters of fiat money. This is just a legal way of saying "Money from nothing". Now, the printing presses of the Federal Reserve was only limited by how much debt our government wanted to assume. Think about that for a second: our money is based on debt that is bought by a private institution that charges the taxpayer interest for doing this. What motivation does the Federal Reserve have to ending this parasitic relationship?
Now, I am not one of these wackos that thinks all Bankers are evil, but what I am starting to realize is, there are elitist, transnational bankers who think nothing of ruining the economic vitality of a nation, just to enslave its' people to interest paying serfdom.
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